For most Californians, electricity could soon cost different amounts at different times of day.

And their utility bills could rise as a result.

California energy regulators have proposed a set of sweeping changes to the way most of the state's residents pay for power. The current system, in which electricity prices are based on the amount used, would be fundamentally altered by 2018, under the proposal issued this week by the California Public Utilities Commission.

Standard residential rates would vary by time of use, encouraging Californians to conserve during afternoons when demand on the state's power grid hits its peak. State officials and energy economists have long pursued the idea, seeing it as a way to avoid building more power plants.

"The system is designed for the absolute maximum demand - and then some," said James Fine, senior economist at the Environmental Defense Fund. "Having less demand for energy at those times really saves the system a lot of money."

Under the commission's proposal, homeowners and renters who prefer to stick with flat rates would still have that option. But the flat rates would change, with people using the least electricity paying more than they do today, while people who use the most would pay less.

Increases for most users

In addition, the state's big utility companies would either add a fixed, monthly charge to residential bills or set a minimum bill level, spreading out the costs of paying for the grid.

Taken together, the proposed changes would raise bills for most residential utility customers.

A typical Pacific Gas and Electric Co. customer using 600 kilowatt-hours of electricity per month currently pays $75.05, according to the utilities commission. If that customer doesn't change her energy-use habits, switching to "time-of-use" rates would boost her bill by 16 percent, to $87.43. The commission estimates that choosing the revised flat rates instead would raise the customer's bill to $85.04, a 13 percent increase.

Homeowners with the highest current bills, in contrast, would pay less under the new system.

Residential PG&E customers using 1,200 kilowatt-hours of electricity per month would save 17 percent under the proposed time-of-use rates, with their monthly bills dropping from $238.50 to $198.27, according to the commission. They'd also benefit from the revised flat rates, but not as much, saving 14 percent.

The proposed changes, drafted by the commission's staff, would affect the state's large, investor-owned utilities, not municipal utilities such as those in Los Angeles or Sacramento. The changes would need to be approved by the commission's five-member board to take effect. That vote could come this year.

But approval won't come without a fight. Consumer advocates have deep reservations about time-of-use pricing, saying that shifting energy use from one part of the day may be more difficult than anticipated. They also don't like raising rates on people who use the least amount of electricity.

'A rude awakening'

Matthew Freedman, staff attorney for The Utility Reform Network, said the proposed changes could raise bills for people living in California's hot inland valleys. On summer days, they would still need to run their air conditioners in the afternoons, when power prices would peak.

"When it's 100 degrees out, I'm not sure it's reasonable to ask anyone to do without their air conditioning," Freedman said. "There's a rude awakening that lies ahead if the PUC pushes ahead on time-of-use pricing. The potential for a customer backlash is real."

The changes are designed to fix a growing imbalance in electricity rates.

California currently bases its rates on "tiers" of electricity usage, with people in the lower tiers paying less per kilowatt-hour than those in the higher tiers. During California's energy crisis of 2000 to 2001, the state Legislature froze rates for people in the bottom two tiers. But rates were allowed to increase for the higher tiers.

As a result, any increased costs faced by the utilities fell on a relatively small group of customers. At one point in 2010, customers of PG&E's highest tier were paying almost 50 cents per kilowatt-hour for electricity, while customers in the lowest tier were paying 12 cents. People in the lower two tiers no longer pay enough to cover the costs of providing service to their homes, according to the commission.

Upper-tier customers complained to Sacramento. In response, the Legislature authorized the utilities commission last fall to undertake a major rate overhaul.

If approved by the commission, the proposed changes would be phased in starting in 2015. The number of tiers - currently four, for PG&E - would be cut to three, then to two in 2018. And the price difference between the two tiers would be reduced.

But unless they specifically chose to stick with tiered rates, most Californians would be automatically switched to time-of-use rates. Higher peak prices would encourage them to shift optional energy usage to times of day when demand on the state's power grid is relatively light. That could mean running the dishwasher or the washing machine in the morning or late evening, instead of the afternoon.

All of PG&E's business and agricultural customers either have time-of-use rates already or are switching to them, according to the utility. PG&E also now offers optional time-of-use rates for residential customers, with 35,000 people taking part.

Different types of customers

Freedman questioned whether the change to time-of-use pricing would produce the results its backers want. He urged the commission to take its time with the proposal and study how it would probably affect different types of utility customers in different parts of the state.

"Some electricity use is discretionary, and some isn't," Freedman said. "There's also a real potential for people to say, 'Whatever - I've got to live my life.' "